Uber drivers working for 'less than the minimum wage'

“I’m kind of hooked on it. You meet so many great people, have great conversations about politics or whatever. It’s so amazing that sometimes I don’t want the ride to end.”

“And when it’s a nice day, it’s perfect to be outside driving. Otherwise I’d be in my office in front of a monitor.”

This is Max, who has been a Melbourne Uber driver for the past two years.

It’s an idyllic picture of all that being an Uber driver has to offer and lends perfectly to the dream many office workers have of escaping the rat race and being their “own boss”.

But that, and the undeniable flexibility the job offers, is, according to Max, where the dream ends and the harsh reality kicks in.

“Once the bills start coming you really feel it. You sit down and see how little you made and realise Uber is exploiting you. There is not even enough money to put into your superannuation and you have to pay your taxes.”

“You end up with what you earn is pretty much what you spend. In my opinion after doing this for so long now I’m realising it’s a scam.

“The prices are so low, it’s drivers who are actually financing the entire Uber experience.”

As well as being a driver, Max – who does not want his surname published for fear Uber will deactivate his account - runs RideShare Drivers United, a group which claims to represent 1600 Uber drivers Australia wide.

The group has crunched the numbers on Uber driving and claim that once the ridesharing giant’s commission and driving costs are taken into account, most will be working for well below the minimum wage.

According to Uber, most drivers will earn about $30 plus an hour. Uber then takes its cut, which can be either 20 or 25 percent depending on that date you signed up. More recent recruits get slugged the higher amount.

Add to that fuel, rego, tolls, depreciation and GST and the numbers start looking less and less lucrative, Max says.

In fact, according to RideShare Drivers United, many Uber drivers could be working for as little as $12 an hour.

The national minimum wage is $18.29 an hour, plus casual employees get a 25 percent loading and 9.5 percent superannuation.

“I think the reality check comes in after you drive for around six, seven months when you realise your car is doing a lot of kilometres. You start doing your BAS statements are you realise that you are not making any money you are actually losing money on your car,” Max says.

“And if you are making any money it’s actually the value of your car that you’re getting, that’s all. It’s kind of a scam really.”

“You see many people in this position. People using their own car and then the kilometres are starting to pile up and they end up with a very depreciated car.

Joseph Lavy has been Uber driving in Melbourne for two years. ()

“Now they have to buy a new car but Uber is paying peanuts so they don’t have any savings. It’s a catch 22.”

A spokesperson for Uber said the company regularly held roundtable sessions with driver-partners to get direct feedback on the driver app and to ensure they are delivering a quality experience for drivers.

In June, Uber raised minimum fares and introduced a range of product improvements following feedback from drivers, the spokesperson said.

“Australians choose to drive using the Uber app because they like setting their own schedule and being their own boss. We know drivers can make money on a range of different ridesharing apps and we work hard to ensure we're offering the best possible experience so they continue to choose Uber,” a statement said.

‘It works for people in between jobs’

Justin, who usually works in IT sales, has been Uber driving in Sydney off and on for the past two years while between jobs and says it’s a handy way to earn some extra income.

The rate Uber charges in Sydney is $1.45, 45 cents per kilometre higher than in Melbourne, which makes taking home a profit easier.

Justin estimates he would earn between $20-25 per hour Uber driving in Sydney, once all the expenses are taken out.

“At the end of the day Sydney is an expensive city and if you are earning $40k a year it’s kind of liveable but it’s not like a proper salary,” Justin told Nine.com.au.

“I think it works for people who are in between jobs, or building a business on the side. Semi-retired people or whatever else it might be.

“It’s very much a choice in that sense. It would be interesting to see how many people have been doing it for a long period. I imagine that a lot of people would do it for 3-6 months and then find something else.”

Like Max, for Justin it’s the flexibility and the social interaction that are the highlights of the job.

Taxi drivers protest outside Parliament house in Melbourne over Government deregulation plans for the Taxi industry in February. ()

“I enjoy chatting to people. You get quite a few good stories,” Justin says.

“Uber has a badge system for drivers, which I thought was really stupid at first but I’ve kind of gotten a bit addicted to it now,” Justin says, referring to the positive feedback tool customers can use to pat drivers on the back.

“You can get badges for things like customer service, or clean car, cool music, great conversation. At first I thought it was silly but now I keep checking up on it.”

Driving the competition

Justin admits that one thing that has changed for drivers over the years is the competition between drivers for fares as Uber floods the market with more and more recruits.

According to Uber, it now has 70,000 drivers Australia wide. Although figures released by the ATO earlier this year appeared to show that only about half of its drivers were actively working.

It’s a common complaint from drivers, that their higher numbers have led to less fares and a higher wait time in between jobs.

“The volume of work has probably dropped. There are more drivers on the road. But I believe that you’ll find the work if you want to do it, Melbourne Uber driver Joseph Lavy says.

Mr Lavy said trying to support his family with Uber driving was probably not possible, but it was a good supplementary income.

“I’ve done the maths on it. If you are going to look at a per hour rate then you may as well work for somebody, that’s my opinion of it.

“But people look at it the wrong way. You are not working for somebody, you are doing your own hours,” he says.

“I know that I can stop to pick up my kids from school or go and see an activity of theirs. When you work for somebody you have got to go and ask permission for that sort of thing.”